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Uber loses London employment appeal, must give holiday time and minimum wage

By Patrick Higgins  |  10/11/2017 14:50
Judge Jennifer Eady of the Employment Appeal Tribunal said that the original tribunal last October was right to conclude it was Uber was quasi-employing these drivers as workers as Uber exerted a significant amount of control over them, and rejected Uber's claim that it merely connected drivers to customers.

This ruling, though it will continue to be deliberated for years, is significant. Uber is under attack from all sides. In addition to these new employer requirements, Uber is also threatened by Transport for London (TfL), London's chief transport regulator, who is threatening to revoke Uber's operations license. Uber will appear in court on December 11th in London to appeal TfL's license revocation. Both of these legal developments bode poorly for Uber, as the UK is its most important market in Europe.

Despite Uber's determination to take this case through the Court of Appeal and the Supreme Court, if in the future the higher courts repeatedly rule against Uber, Uber's business model will be in serious jeopardy. The requirement to treat its 40,000 UK drivers as workers, entitled to minimum pay and holiday time, means Uber will most likely have to schedule shifts for the drivers, eliminating the ability to work as much/as little as you wish. Additionally, Uber will face much higher tax bills, as it will be legally obligated to pay NIS costs.

Besides the apparent downward spiral facing Uber, this ruling has drastic implications on the so-called gig economy taking root worldwide. The gig economy, defined by people who work independently through apps and are not explicitly employed by any company, is become increasingly popular in major urban centers, as it allows flexibility of work and more time management. However, many of these gig workers working for companies such as Uber have complained of a lack of personal security, both financially and healthcare-wise.

These developments will be critical to watch going in the future. The direction of these legal proceedings will have a chain-effect on the rest of the gig economy structure. Because of this, many of the urban, connected start-ups will be looking on nervously.

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